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IPE special report May 2018

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Call for single European asset management market

EUROPE – A single European market in asset management could increase the overall size of a pension by nine percent for the average investor, says the UK’s Investment Management Association.

The trade group has commissioned a report by Mannheim-based Centre of European Economic Research - which has revealed the benefits of a market without existing impediments to cross-border trade. The IMA is using the research to start a debate on the appropriate reforms to achieve this.

According to the data, a single European market in asset management would bring economic benefits of at least five billion euros a year.

The IMA has prepared a position paper, with recommendations called “Asset Management in Europe: The Way Forward”. It will be presented in Brussels tomorrow.

Last week the IMA’s Alan Burton said asset management needed a louder voice in Brussels.

Says Sheila Nicoll, deputy chief executive of the IMA: “Asset managers are keen to develop a single market for asset management – but are still coming up against roadblocks.

“The benefits for consumers of a single European market in asset management, and particularly investment funds, are enormous. We have identified a series of practical steps that should move us towards achieving these benefits.”

At a press conference in London, Alan Ainsworth, chairman of European strategy at the IMA, and deputy chairman at Threadneedle Investments, emphasised that the issues could be addressed without further legislation from Brussels. He called on the Commission, member states and industry participants to work together for the first time.

Barriers within the cross-border market at the moment, according to interviews and research conducted by ZEW, include discriminatory taxation, fund mergers, distribution, registration, infrastructure and transparency. Ainsworth highlighted tax as one of the main barriers to cross border business, and said that every single member state has discriminatory tax laws against non-domestic funds in some form or another. Here the IMA is recommending the Commission use its enforcement powers.

The IMA is also recommending on behalf of its members a standardisation of infrastructure and improvement of public data on fund management.

Nicoll added that in addition to fighting the case of a single European market, part of the exercise was to raise the profile of asset managers in Brussels, when, in the past, it is often the sell-side that has been the focus.

“We look forward to a debate with policymakers and our colleagues in the rest of Europe about how to go forward. We have set ourselves deadlines to review the position and look forward to reporting positive developments over the coming months and years,” said Nicoll.

The IMA is the trade body for the UK-based investment management industry. Between them, IMA’s members manage 2.8 trillion euros in the UK of which 1.265 trillion euros is for non UK clients.

Last week the IMA appointed Lindsay Tomlinson, chief executive officer of Barclays Global Investors, Europe to take over from Burton as chairman.

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